April 30, 2024 |7 min read
When it comes to apartment rentals, what’s considered an acceptable credit score can depend on the policies of the landlord.
Read about the role of credit in a landlord’s rental decision. And learn how to improve your credit to position yourself as a great tenant.
Key takeaways
- There’s no official or legal minimum credit score needed to rent an apartment. Instead, required scores can vary by region and a landlord’s policies.
- Landlords may typically look for tenants with at least a fair or good credit score.
- Landlords may also use tenant screening reports, with information like rental history and employment verification, to make rental decisions.
- If you’re still building or establishing credit, then getting a co-signer or guarantor, applying with a roommate, providing additional documentation, or paying a higher security deposit may help you get approved.
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How do credit scores affect renters?
First, it’s important to understand that tenant background checks may involve reviewing an applicant’s credit. But the process is different from the kind of credit checks used to review loan or credit card applications.
It’s also worth noting that not all landlords look at credit scores. And that they may consider factors beyond your credit, such as your income.
But what if your potential landlord does review credit? Generally, the higher your credit score the better. Credit-scoring company FICO® says that a score above 670 is a positive indicator. And that anything below might make your landlord “take a closer look at your credit details.”
Tenant background checks might also be referred to as resident screening reports or tenant screening reports. You can learn more about them from the Federal Trade Commission.
What landlords may look for on credit reports
Here are some of the things a landlord might look for on a potential renter’s credit report.
- Accounts in collections
- Bankruptcies
- Evictions
- Late payments
- Loan defaults
Tips for renting with new credit or bad credit
If you’re new to credit or have low credit scores, here are ideas for improving your chance of being approved for an apartment rental.
- Find a co-signer or guarantor. A co-signer or guarantor is someone who agrees to take responsibility for rent payments if you can’t make them. But while a co-signer is responsible for missed rent payments, a guarantor is typically only responsible if you default on your lease or break it early. Since your behavior could affect the credit of your co-signer or guarantor, it may be a good idea to discuss the risks beforehand.
- Apply with a roommate. You may have a better chance of being approved with a roommate’s additional income and credit information—if they have good credit—taken into account.
- Provide additional documentation. Documents like an employer reference, on-time utility payments, recent pay stubs and rental history may help assure landlords that you can make rent payments on time.
- Pay a higher security deposit. Many renters pay a refundable security deposit that can be withheld to cover unpaid rent or damage to the apartment. The deposit is often equal to one month’s rent. If your credit is less than ideal, you may be required to pay a larger security deposit.
- Look for a private landlord. Some property management companies might automatically rule out candidates with poor credit. But private landlords and homeowners may have more relaxed requirements for renters.
Ways to help improve your credit scores to rent an apartment
Check out these ways to show responsible credit use and improve your credit scores for an apartment rental.
- Pay on time. Your payment history can be a significant factor in determining your credit scores, according to both FICO and VantageScore®, which are major credit scoring companies. Setting up automatic payments is one way to help ensure you don’t miss a payment due date.
- Pay more than the minimum. Making only your credit card minimum payments comes with a cost: interest charges. Interest can add up, cost you more money in the long run and make it harder to pay off debt. The Consumer Financial Protection Bureau (CFPB) recommends paying more than the minimum payment and paying off your entire balance each month whenever possible.
- Keep your balances low. Your credit utilization ratio is the amount of credit you’re using versus your total available credit across all your accounts. A low credit utilization ratio can show that you’re using credit responsibly, which could help improve your credit scores. For that reason, the CFPB recommends using no more than 30% of your available credit.
- Only apply for the credit you need. Applying for new credit can trigger a hard credit inquiry by the creditor. While one hard inquiry will generally only affect your scores by a few points, keep in mind that too many hard inquiries could have a more negative impact.
Credit scores for renting an apartment FAQ
Still have questions about renting and credit scores? Here’s more information.
Is there a way to rent an apartment if I don’t have credit?
While being approved to rent an apartment may be more difficult with no credit history, it may still be possible. Strategies include using a co-signer or guarantor, applying with a roommate and making a larger security deposit. You may also be able to provide additional documentation to convince a landlord that you’ll be a responsible renter.
For lots of reasons, it can be a good idea to start building credit as soon as you can. You could start with these ideas for building your credit from scratch. Using a secured credit card responsibly is one of them.
What else do I need to consider before renting an apartment?
Before renting an apartment, it’s important to consider how much rent you can afford. Building a budget can be a good starting point. Don’t forget to include expenses like moving costs, monthly utilities and new furniture or appliances you’ll need.
You may also want to look into getting renters insurance. The coverage can both protect you from liability and your personal property from damage.
And before you sign on the dotted line, read the entire lease agreement carefully. Make sure you fully understand the terms you’re legally agreeing to.
Do landlords do hard or soft credit checks?
If a landlord checks your credit, it could result in a hard credit check. According to FICO, a hard credit check can temporarily lower your credit scores, usually by just a few points.
Will a 600 credit score get me an apartment?
According to FICO, 600 is considered a fair credit score. The company says a score above 670 is better. While 600 may not be as desirable to landlords, it still may be possible. That’s because acceptable credit scores can vary by region and a landlord’s discretion. And landlords may consider other factors including a person’s income.
Credit scores needed to rent an apartment in a nutshell
A person’s credit score and history may be factors in a landlord’s decision to rent them an apartment. If your credit is less than ideal, one of Capital One’s fair and building credit cards could help you build or establish credit with responsible use over time.
Plus, while you work on improving your scores as you look for an apartment, you can monitor your credit with CreditWise from Capital One—without hurting your scores. And CreditWise is free for everyone, even if you’re not a Capital One cardholder. You can also get free copies of your credit reports at AnnualCreditReport.com.
